Ruling description
In the judgment of August 18, 2015 (case no. II FSK 2510/13) the Supreme Administrative Court confirmed that a registered partnership is excluded from the scope of application of the Capital Duties Directive (69/335/ EEC). Therefore, Restructuring activities in such a company are subject to civil law transactions tax (PCC).
This month’s summary of “also ran” update items forms a fairly eclectic mix, however some useful items can be pulled out of them.
PPF guidance to Insolvency Practitioners onpre-pack
Mistaken discharge of land mortgages and rectification atthe Land Registry – can a discharged mortgage secure asubsequent advance?
It is well-established law that a mortgage can be used to secure further advances made by a lender. What happens when a registered mortgage is mistakenly discharged at the Land Registry however? Can it be rectified and used as security for a subsequent advance? NRAM Plc v Evans and another - 2015 EWHC 1543 explores the issues.
The recent decision in Brooks and Willetts (Joint Liquidators of Robin Hood Centre plc) v Armstrong and Walker [2015] EWHC 2289 sets out guidance on the burden of proof for directors in wrongful trading claims when seeking to establish that they have taken every step to minimise the potential loss to creditors. We explore the issues raised for practitioners.
The background to the case
The question of appropriate action in the face of directors’ duties to creditors in the pre-insolvency “twilight zone” is a perennial one. In particular, the question of preservation of asset value (given all the hoo- ha about pre-packs), and whether to transfer out assets before insolvency has an impact on value, is fraught with difficulty. Two recent cases offer contrasting versions of how to go about it.
Background – Re French UK plc
We all know that statutory demand can be issued for undisputed debts in excess of £750, and if not satisfied for 21 days, the stat demand is prima facie evidence of insolvency. What happens where there are multiple dents of less than £750 each however? Howell v Lerwick Commercial Mortgage Corporation Ltd [2015] EWHC 1177 (Ch) provides an insight.
The background
The Czech Supreme Court recently issued two decisions having significant impact on the position of secured creditors (i.e. generally financial institutions) within insolvency proceedings. Both decisions stem from one of the first major insolvencies conducted under the (then new) Czech Insolvency Act effective from 2008 in respect of the group of companies in a glass-making business. This article briefly reviews those decisions and points out their practical effects on the rights of secured creditors.
Security interest in rental income
In Mark Howell v Lerwick Commercial Mortgage Corporation Limited, the High Court has held that statutory demands will not necessarily be set aside if the undisputed debt is less than £750, where there other debts which would take the cumulative total over this limit.
Facts
Mr Howell obtained finance from Lerwick in 2010 to develop a property and paid £2,750 to Lerwick to obtain a valuation. Mr Howell claimed that the valuation provided was sub-standard, and as a result there were delays in the development and its subsequent sale.
The Tribunal has upheld HMRC's decision that a company (Danesmoor Ltd) should not be entitled to recover input VAT incurred on professional fees for a corporate restructuring. HMRC had not allowed the recovery of the input VAT on the grounds that the services were not provided to the company. The appellant argued that the advisors had been engaged and paid for by the company directly in connection with the restructuring and as such the input VAT should be recoverable.
In an interesting decision with important implications for both Chapter 15 practice and financial institutions’ global credit risk analyses, a US Chapter 15 court (the “Court”) granted recognition of a number of Brazilian proceedings involving entities within the OAS Group. See In re OAS S.A. et al., Case No. 15-10937 (SMB) (Bankr.